Cacola 1H Result Press Release

CACOLA 1H NET PROFIT JUMPS 42% TO RMB85.5M

-Growing consumer awareness of the CACOLA brand

-23 new stores added in the first half of the year

-Growing presence in the PRC with total of 152 CACOLA specialty stores

-Set to open a 6,000m² mega store in Chongqing and home-deco centre in Dongguan by end 2008

SINGAPORE, 11 August 2008 – Cacola Furniture International Limited, an integrated lifestyle furniture designer and manufacturer in the PRC, posted a 42% leap in net profit to RMB85.5 million, or 24.8 RMB cents per share, on a 35% growth in revenue to RMB368.5 million for the six months ended 30 June 2008 (“1H2008”).

Strong panel furniture and sofa sales led the growth, accounting for an aggregate 84% of overall top-line increase.For the second quarter ended 30 June 2008, the Group achieved revenue of RMB180.0 million, representing an increase of 32% from the previous corresponding period. Net profit was 20% higher at RMB40.6 million.

The Group’s sterling results reflect the overall positive real estate sentiment that is fuelling the vibrancy of China’s furniture retail industry, as well as growing consumer awareness of the CACOLA brand name. Capitalizing on the positive sentiment, the Group added more points-of-sale and ramped up its advertising activities during the period. Average gross margin improved from 33.3% in 2Q2007 to 34.3% in 2Q2008, driven by increased demand for customized furniture supplied to hotel and residential projects, and for the Group’s higher quality sofas and mattresses.

Mr Lu Ling Jia (卢领佳), CEO of Cacola said, “The Group’s sterling first-half performance attests to the growing demand for lifestyle furniture in the PRC. It also reflects the growth of the discerning and image-conscious urban consumer, along with the market’s receptivity to Cacola’s furniture and home design concepts.

With continuing urbanization and rising disposable income in the PRC, we expect business to remain robust.”In the first-half of 2008, the Group opened 23 new specialty stores, bringing it to a total of 152 stores. The new specialty stores are located in different cities in the provinces of Guangdong, Fujian, Hunan, Sichuan, Anhui and Zhejiang. Cacola plans to further increase its retail points-of-sale in the PRC to 180 specialty stores by the end of this year.

As part its retail expansion strategy, Cacola will be launching a 6,000m² mega store in Chongqing and a home-deco centre in Dongguan in the second half of this year. These innovative retail concepts will serve to lift the Group’s product and service offerings to a new level and establish its leadership position amongst different target segments such as property developers, interior designers and new home-buyers.

Going forward, the Group will also continue to build on its strong brand name and increase its pace of innovation.“Continuing vigour in the local property market bodes well for us. We will strive to strengthen our presence and achieve long-term, sustainable growth by drawing on the synergies of our design strengths, marketing strategies and strategic distribution channels,” said Mr Lu.

The Group maintained a strong balance sheet and working capital position with approximately RMB238.6 million cash and cash equivalents at the end of 1H08. Net asset value per share was 107.26 RMB cents, up 19% from 90.22 RMB cents at 31 December 2007.